After its first year, the State of Oklahoma is changing how the Parental Choice Tax Credit Program is managed.

This is the program offering parents up to $7,500 in tax credits if they send their child to a private school.

The Oklahoma Tax Commission is trying to recover or “recapture” approximately $5 million in tax credits from around 1,800 taxpayers after analysis showed some students were no longer eligible for the program, the agency confirmed to KRMG.

OTC told KRMG this does not mean taxpayers misused the program or that the credit was granted in error, but it could indicate a change in circumstances that caused them to become ineligible. For example, a child may have started the school year in a qualifying private school, but the family later moved and that child no longer attends the qualifying school.

In that case, OTC said it would attempt to recover the tax credit on a prorated basis.

The agency noted such taxpayers have an opportunity to dispute.

KRMG has learned the schools are required to participate in a reconciliation process to help the state track enrollment for students in the program. Furthermore, OTC said the school receive the checks, not the parents. We’re told this is meant to reduce the possibility of fraud and make sure the money gets to the correct taxpayer.

The State of Oklahoma had been using a third party to administer the Parental Choice Tax Credit Program, but KRMG was told that has changed. The Oklahoma Tax Commission said 20 positions were added specifically to administer the program.

“The OTC decided to bring administration of the program in-house because we were confident in our ability to administer the program in an efficient and effective way, that would provide greater control over program administration,” the agency told KRMG.

Learn more about the Parental Choice Tax Credit Program here.